Apple plans to make everyone your local ATM

We’ve all been there: When you least expect to need cash, you realize your wallet’s empty – the restaurant won’t accept cards, you’re catching a bus, you wanna tip the hotel maid – but there isn’t a bank or ATM around for miles. What do you do in that circumstance? According to a new patent published yesterday by Apple, the answer in the near future might be “pull out your phone and transmit a request for a stranger to give you some money.”

The patent is for what Apple calls an “ad-hoc cash-dispensing network” that would allow members to broadcast their location and amount of cash they desire. The requests are then visible to other members within a certain distance. Once an agreement has been reached between the borrower and lender, the two can arrange to meet at a particular location where the money will change hands, with their reimbursement coming in the form of a payment via the borrower’s iTunes account.

At least, that’s one of the variations on the idea listed in the patent application; others include loans via social networking, electronic transferring of funds, and GPS location of lenders/borrowers. The patent explains that “the ad-hoc cash-dispensing network includes a cash-dispensing server, a network, and a plurality of client terminals that connect to the cash-dispensing server through the network,” describing in detail the “embodiment” of the idea as detailed above.

“Most businesses accept payment through credit, check, or other forms of non-direct cash payments,” Apple says. Although there are benefits to using credit – i.e. fraud alert, theft protections, rewards programs – sometimes you just really need cold hard cash. “For example, some smaller businesses do not accept payment with credit cards because of the charges the proprietor of the business must pay to the credit card companies. Accordingly, there is a need for a cash-dispensing network that allows users to exchange cash as needed.”

The idea brings a familiar online notion – crowdsourcing – to a real world problem. There are obvious potential pitfalls (What if the borrower had an iTunes account that he or she had defaulted upon? What if the iTunes account was fake, or stranger still, the lender was fake and wanted to abuse the system), but the potential for change that it brings can’t be discounted. If Apple manages to make this model of crowdsourcing lending work, then it’d be interesting to see what will happen to banks as a result.